From Dock Street to Essington Avenue The Philadelphia Wholesale Produce Market traces its roots to colonial times, when growers, shippers, and merchants met on Dock Street to trade produce and other commodities. This historic market remained vibrant until 1959 when the city moved wholesale perishables to the newly constructed Food Distribution Center in South Philly.
The Philadelphia Regional Produce Market was part of this center and for the time, the facility was “state-of-the-art” with trailer-height loading docks.
By the early 2000s, with changing food safety regulations and new technology breakthroughs, the tenants at the terminal market were ready for an upgrade.
Today, the Philadelphia Wholesale Produce Market (PWPM) sits on nearly 60 acres in Southwest Philly, and is considered the most modern facility of its kind in the United States. Near Interstates 95 and 76, the PWPM is centrally located for East Coast businesses with easy access to several major truck routes throughout Pennsylvania, New Jersey, Maryland, Delaware, and New York.
Old & New: History Meets High-Tech
Although tenants at the PWPM signed 40-year leases, many of the well known merchants like M. Levin & Company, Pinto Brothers, and Procacci Brothers have been moving produce for generations.
Jack Collotti, president of Collotti & Sons, Inc., has also been around the terminal for decades. Both his grandfather and father worked on the market for years before buying out a vendor and establishing Collotti & Sons in 1975.
John Vena, another third generation vendor, says this market was designed with customers in mind. Wide aisles for two-way traffic and an electric load leveler at every door make it easy to shop and load.
Collotti agrees: “The new facility streamlined the process; it’s a lot easier for customers. Where they would be here six or eight hours before, now they can get out in one hour, even twenty minutes.” Customers who prebook or use call-ahead ordering have even faster turnaround times.
Best of all, perhaps, is that the PWPM is fully enclosed and refrigerated (the largest such market in the world), so the cold chain is never broken. And not only does the facility comply with all current food safety regulations, but it can easily adapt to new rules and restrictions.
Mixed Use: Public & Private
Many terminal markets are not open to the public and are strictly for wholesalers and their retail, institutional, and other customers. Philadelphia’s market, however, welcomes the public and has always been open to everyone. When we asked merchants if this practice ever affected their business in a negative way, most believed the ‘open door’ policy was positive, and of benefit to everyone.
From Dock Street to Essington Avenue The Philadelphia Wholesale Produce Market traces its roots to colonial times, when growers, shippers, and merchants met on Dock Street to trade produce and other commodities. This historic market remained vibrant until 1959 when the city moved wholesale perishables to the newly constructed Food Distribution Center in South Philly.
The Philadelphia Regional Produce Market was part of this center and for the time, the facility was “state-of-the-art” with trailer-height loading docks.
By the early 2000s, with changing food safety regulations and new technology breakthroughs, the tenants at the terminal market were ready for an upgrade.
Today, the Philadelphia Wholesale Produce Market (PWPM) sits on nearly 60 acres in Southwest Philly, and is considered the most modern facility of its kind in the United States. Near Interstates 95 and 76, the PWPM is centrally located for East Coast businesses with easy access to several major truck routes throughout Pennsylvania, New Jersey, Maryland, Delaware, and New York.
Old & New: History Meets High-Tech
Although tenants at the PWPM signed 40-year leases, many of the well known merchants like M. Levin & Company, Pinto Brothers, and Procacci Brothers have been moving produce for generations.
Jack Collotti, president of Collotti & Sons, Inc., has also been around the terminal for decades. Both his grandfather and father worked on the market for years before buying out a vendor and establishing Collotti & Sons in 1975.
John Vena, another third generation vendor, says this market was designed with customers in mind. Wide aisles for two-way traffic and an electric load leveler at every door make it easy to shop and load.
Collotti agrees: “The new facility streamlined the process; it’s a lot easier for customers. Where they would be here six or eight hours before, now they can get out in one hour, even twenty minutes.” Customers who prebook or use call-ahead ordering have even faster turnaround times.
Best of all, perhaps, is that the PWPM is fully enclosed and refrigerated (the largest such market in the world), so the cold chain is never broken. And not only does the facility comply with all current food safety regulations, but it can easily adapt to new rules and restrictions.
Mixed Use: Public & Private
Many terminal markets are not open to the public and are strictly for wholesalers and their retail, institutional, and other customers. Philadelphia’s market, however, welcomes the public and has always been open to everyone. When we asked merchants if this practice ever affected their business in a negative way, most believed the ‘open door’ policy was positive, and of benefit to everyone.
“Every terminal market on the East Coast that I know of is open to the public,” remarked Tom Curtis of Tom Curtis Produce Company, Inc.
And although the Philly market is a shining example of what a terminal market can be, Curtis does cite one drawback to the flow of nonindustry buyers frequenting its hallways. “I think we’ve lost some of the walk-in trade and some of the mom-and-pop stores we used to have at the old market because of location. However, it’s so much easier here to load than in the old market. Further, people used to find it challenging to locate adequate dock space in the old market. Here, those problems don’t exist.”
“We have a variety of people coming in here,” commented Ron Milavsky, vice president at B.R.S. Produce Company. “There are brokers buying for larger wholesalers, people who buy for the diners, store and restaurant owners come in… It’s hard to gauge, but I think more people from the public are coming into the market now that we’re operating in the new facility.”
Vena, of John Vena, Inc., said, “We’ve always had a small percentage of the general public as customers. Before my time, people often visited the market to buy large quantities of local, seasonal items for home canning. When I was starting out in the 1970s,” he continued, “we had quite a few community buying groups and co-ops as customers.
These were kind of a precursor to the CSAs (community supported agriculture groups) of today.
“Ten or fifteen families would pool some money weekly or bimonthly and take turns coming to the market to buy produce. We would help them load it into a station wagon or two and they took it home and divided it into shares,” Vena notes.
“Nowadays, we see many families or individuals coming in to buy a few cartons of favorite fruits or vegetables around the holidays or for family or neighborhood events. Our new facility is really easy for customers of any size to take advantage of, so I think it is a positive thing.”
Mark Levin, chief executive of M. Levin & Company, Inc., reiterated that though the terminal market has always been open the public, “many people are not aware of this. Individuals may have found it hard in the past to shop at the market for many reasons,” he says, “but with our new, beautiful, bright, and clean facility, we have seen more and more members of the public shopping at the market.”
Most importantly, Levin explains, “People just have to remember they can’t come in and purchase a handful of bananas—they have to purchase a 40-pound box of bananas! Everything is sold in bulk, by the case. A recent trend is individuals or groups buying for their communities in co-ops (or similar organizations) to get the best prices and freshest produce around.”
For Todd Penza, who heads up sales at his family business, Pinto Brothers, Inc., customers are customers, and even smaller purchases can add up to significant business—no matter where the buyers are from. “The cash customers who walk in here are one of our largest groups of customers. We make sure we pay special attention to their needs, because they’re such a strong customer base in this market.”
A similar sentiment was expressed by Rick Feighery, vice president of sales at Procacci Bros. Sales Corporation: “The way I feel is, we’ll take all the business that walks up to us. Individuals who walk in and buy single cases are just as important to me as those who buy truckloads. All the drops fill the bucket.”
Jack Collotti puts it this way: “The market has always been open to the public, so I don’t notice any change. We don’t have a primary customer base; we sell to everybody.”
Pros & Cons: Adapting to Change
As brokers, wholesalers, and shippers must adapt to changes in the marketplace and in policies, so must growers.
Among the major concerns are immigration reform, upcoming food safety legislation, and shifting to more eco-friendly production. Related to the latter, many growers have continued to experiment with integrated pest management, using minimal amounts of pesticides and herbicides in a scientific, targeted manner.
“We have very smart and innovative producers, who work through their industry channels to adopt these new tech research procedures,” commented Lela Reihart, a grower who is also director of the Bureau of Market Development at the Pennsylvania Department of Agriculture.
Learning new pest management techniques can be even more challenging in the face of constantly changing weather patterns. The mild winter and warm spring of 2011 and early 2012 led to an early harvest; in contrast, the seemingly endless winter and very cold spring of 2012 and 2013 led to crop damage in certain parts of the state.
May’s cold snap damaged tree fruit and some row crops, while freezing temperatures caused losses in processing tomato transplants that were protected but not yet in the ground. Tomatoes are the state’s top dollar commodity, followed by sweet corn, bell peppers, musk melon, cucumbers, and watermelon.
Many merchants at the PWPM voiced concerns about the state’s heavy rains back in June. Yet Penn State University Extension horticulturalist Steven Bogash found the downpours flooded very few fields, and did not affect most vegetable or berry growers. By mid-June, growers using hoop houses and greenhouses were already harvesting strawberries and some vegetables. For Bogash, the season was ‘normal’ despite the soaking in June.
Demand Local Still Hot
In Pennsylvania, 510,000 tons of fresh fruit and vegetables are produced each year, generating sales of more than $200 million.
Demand for local produce has remained relatively stable in the last year, with increases in certain commodities. Chris Powell, chairman of the Pennsylvania Vegetable Marketing and Research Program, reported increased interest in smaller watermelons and some “old school” crops such as kale, parsnips, and rutabagas as well as specialty varieties like colored beets (golden and white versus the traditional red) and rainbow carrots.
Curtis says many of his customers want locally grown lettuces and greens, and this can be problematic when excessive rain washes sand into the crops. In his opinion, when conditions are right, local and Canadian romaine can compare with the quality and consistency of produce out of California.
“A lot of our customers have a fixed requirement that the product has to be from California,” Curtis says. “Some retailers and wholesalers will readily use local and Canadian product from
good growers with all the proper GAP certificates and traceability in place. These shippers have a large following for their product.”
Levin also balances local with other domestic product as well as imports. Although “people are looking to support our farmers here in the states, and feel a sense of pride” in doing so, Levin still sources many fruits and vegetables from outside the United States. Surprisingly, he struggles to convince some customers certain items, such as bananas, are impossible to grow locally.
Jim Storey, who’s worked with his family at Quaker City Produce Company since the age of 12, says local berries, while in demand, don’t hold a candle to the California crop. Quaker City carries both local and California berries, but doesn’t often import from other countries. “When supply gets a little short, it helps us,” he says. “We’re able to sell to customers, knowing they might not be able to get it later.”
State branding programs and commodity cooperatives like Pennsylvania Simply Sweet Onions in Lancaster County, the Endless Mountain Tomato Cooperative in the western part of the state, and Knouse Foods, an apple co-op in Adams County, let brokers and wholesalers aggregate local supply. This in turn has led to an increase in fresh produce sold via direct sales to various merchants at the PWPM as well as wholesalers in New Jersey and New York. Brokers and wholesalers in search of local product can contact the Pennsylvania Department of Agriculture Bureau of Markets for help.
Procacci Bros., in business since 1948, carries a wide variety of produce from around the world. Feighery notes local growers’ efforts to improve packaging, boxing, and labeling makes it more appealing to buyers.
In his view, the desire for local product stems from freight savings. When it’s harvest time in the northeast, growers in California are challenged to compete against local growers who have competitive pricing and a savings of as much as $9 per box on freight. “That’s a lot of money, particularly when consumers are looking for value,” Feighery says.
Procacci’s business is diversified enough to meet various customer demands, including for local product. Santa Sweet tomatoes and ‘Ugly Ripe’ tomatoes are top selling local products. The tomatoes are grown in New Jersey, other states, and also in Mexico.
The company controls production from seed to fruit—which includes a research facility in Florida to find disease resistant varieties, and packing facilities throughout the United States and Mexico. Having research fields in Florida allows the company to experiment with various growing methods and conditions.
“The growing conditions in each location are completely different,” Feighery explains, “and the growing conditions in the same location are completely different.” Each year, Feighery says the variables change, including cold or warm starts and too much or too little moisture. “It takes months to plan, organize, and prepare what you’re going to grow,” he points out, and all of this is long before actually getting to the point of planting seeds.
What’s Hot: Ethnic & Specialty Choices
Though consumer demand for local produce is growing, it’s nowhere near the demand for ethnic produce or having year-round availability of fruits and vegetables. In more recent years, ethnic diversity in Philadelphia has grown significantly, with consumers wanting the fresh fruit and vegetables of their home countries.
Such demand has put a wide range of commodities on store shelves and in restaurants that simply were not available a decade ago. Subsequently, many tropical fruits and Asian vegetables have become mainstream items. Vena believes the area’s strong restaurant industry has helped drive interest in ethnic commodities in both foodservice and in retail outlets.
Levin reports increased demand for both ripe and unripe plantains and Storey has had more requests for cilantro. Curtis used to sell hundreds of cases of endive and escarole each week, some of which has been replaced by California leaf lettuces, Spring Mix, and prepackaged processed greens.
Additionally, Curtis also sells a significant number of cases of ‘Maradol’ papaya each week. “I was the first person to bring Maradol papaya into Philadelphia twenty years ago from Mexico,” he laughs. “Nobody wanted to buy it then. Now we sell 400 cases a week.”
Penza at Pinto Bros. says premium mangos are getting more popular each year due to the growing Indian population that prefers fresh fruits and vegetables over frozen, processed, or canned. Other merchants across the market echoed much the same sentiment.
The Philly Advantage: Melding the Past, Present, and Future
For most merchants at the PWPM, the honeymoon is not over. They are a proud and confident bunch and cite many advantages to doing business at the Philly market.
Levin says a fresher or a better variety of produce is not available anywhere else, but more significant are the people. The market boasts twenty-five vendors, and all are produce experts.
Vena declares: “We have a dedicated core of very competitive merchants offering every product in season.”
The Philadelphia produce scene is certainly steeped in history. John Vena, Inc. was founded in 1919, by the current president’s grandfather. Joe Procacci started Procacci Bros. in 1948 as a tomato repacker but diversified in the 1960s by acquiring growing operations, which opened the door to other commodities.
M. Levin and Company, in its 107th year, is still family-owned and currently being run by its third and fourth generations. The fourth generation is entirely female—which differentiates the company from its competitors.
The produce industry used to be male dominated, but as Mark Levin points out, “these days there are more women joining the industry and it’s really a great thing. Women are highly capable of running successful businesses, and there will be more women entering the produce industry as time goes on.”
Levin further emphasizes the importance of understanding all facets of the industry. Each generation has taught the next about the importance of building and keeping relationships with people in different sectors of the trade. “There is always something new to be learned,” says the industry veteran.
Challenges
For Philadelphia’s terminal merchants, challenges ran the gamut from sourcing and spoilage to finding affordable transportation.
Procacci’s private labeling has gained focus in recent years, with retail partners taking about half of the company’s tomato business and more than half of its organic sales. “It’s a good thing and a bad thing,” Feighery says.
It’s good for the retailer, because labeling continuity lends brand identity to departments and the produce section; the downside is the loss of Procacci’s own brand identity as a grower-shipper. “Santa Sweets have a specific flavor profile, and when we put a private label on it, we kind of lose that brand identity,” Feighery reports.
For this and other reasons, Feighery feels it’s important to reintroduce Procacci Bros. to the community of smaller retailers and foodservice operators by making regular sales calls. “Some of our customers see only one side of us, so they think of us as just organics, or just tomatoes, or strawberries. We’re constantly letting people know we do all of it.”
Andy Economou, general manager at Unifrutti of America, Inc., considered the 2012-13 season was one of the worst for market loss and spoilage due the unexpected and lengthy Chilean port strike. In addition, some of Unifrutti’s suppliers delivered poor quality grapes later in the season.
“We decided to protect the reputation of our exporters and at the same time to deliver grapes to our customers that met their required specification standards. It was difficult at times, but our methods and procedures proved to be acceptable to all parties involved,” Economou says. Yet the challenge provided the greatest achievement of the year as well: delivering adequate volume of fruit to customers with minimal complaints and price adjustments.
Curtis was also among those who struggled with poor quality this spring. Unusually poor growing conditions in Yuma and Huron led to lower-quality leafy greens. “There were a lot of headaches as far as bringing product in and trying to have it make grade,” he reports.
“We no sooner got through that and had a tremendous trucking challenge out of California, where rates are anywhere from $9,000 to $9,500 out of Los Angeles.” Surprisingly, rates did not skyrocket around the Fourth of July as usual, but actually fell this year. Anything, it seems, can happen. “This is a delicate economy,” Curtis says, “and it doesn’t take much to put a ripple in it.”
For Collotti, the toughest challenge has been “fighting the economy. People tighten their pocketbooks, they don’t spend as much.” Though he, too, struggled with high freight costs. Indeed, all merchants receiving produce from California faced high transportation rates this year. “The produce is available; the problem comes with finding affordable transportation to bring the product in,” commented Levin. “The price of fuel, plus new regulations implemented by the government, is really driving up transportation costs.”
Vena has experienced other growing pains: recruiting, hiring, and training, which force him and his team to focus on things other than product development and customer service.
For B.R.S. Produce’s Milavsky, his toughest challenge in the past year “were large increases in rent—about 2.5 times what we were paying before.” Fortunately, Milavsky says the company is doing sufficient business to overcome the additional costs. The upside is convenience: “Everything else is much more convenient and easier to work with.”
A Reason To Look Forward Though weather patterns become more erratic and fuel prices seem to increase each year, Philly’s merchants remain optimistic about the future of the market.
“More people are eating healthy, trying to eat fresh fruits and vegetables because of all the good publicity from nutritionists,” says Quaker City’s Storey. “The Obamas tell people to eat healthy and eat your broccoli. Business is up. With all the free publicity we’re getting, sales only have to go up—but with the weather challenges, we may see supply issues.”
Although the PWPM’s mortgage certainly puts a strain on merchants, Curtis believes the market will pay off for everybody. “We were ahead of our time, ahead of the curve,” he says, referring to the food safety issues addressed by the unbroken cold chain at the new facility.
It cost over $300 million to build the PWPM facility—to build a comparable facility in New York or Baltimore would undoubtedly cost more. “In a year from now, even five years from now, the Philadelphia Wholesale Produce Market will still be on top of its game,” Levin predicts. “We will still be the ‘future of fresh’ for years to come.”
Levin is so confident about the “Philly Advantage,” in coming years, he expects to see more wholesalers from outside the state sending trucks to the facility.
